CHIPS and Science Act

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The CHIPS and Science Act drew bipartisan support, reflecting broad concern about U.S. reliance on foreign-made semiconductors.

Erin Scott—Official White House Photo

The CHIPS and Science Act is a United States federal statute aimed at increasing domestic semiconductor manufacturing, strengthening supply chains, creating jobs, supporting innovation, training STEM professionals, and protecting national security. CHIPS is an acronym for Creating Helpful Incentives to Produce Semiconductors.

Lawmakers passed the act in response to several pressing challenges. A global chip shortage during the COVID-19 pandemic revealed the extent of U.S. dependence on foreign semiconductor manufacturers—most notably Taiwan Semiconductor Manufacturing Co. (TSMC). Many also worried that inadequate funding for science and STEM education—science, technology, engineering, and mathematics—was threatening America’s long-term competitiveness.

Semiconductors are materials (like silicon) that control the flow of electricity in electronic devices. They are the foundation of integrated circuits—the tiny, complex parts inside computer chips that power modern technology.

Advanced chips are highly specialized semiconductor devices designed for the most demanding tasks, such as artificial intelligence (AI), military systems, high-performance computing, and consumer electronics. All advanced chips are semiconductors, but not all semiconductors are advanced. Simpler chips are used in everyday products like cars, home appliances, and medical devices.

Semiconductors are critical to the digital economy, and losing access to them would threaten both U.S. economic strength and national security. The U.S. semiconductor industry plays a leading role in chip design. Companies like NVIDIA (NVDA), Advanced Micro Devices (AMD), Intel (INTC), and Qualcomm (QCON) are global leaders. They also shape critical intellectual property and software tools that underpin modern chip production.

But most advanced chips are produced by Taiwan’s TSMC, with some made by South Korea’s Samsung. The dependence on overseas manufacturing stemmed largely from the high cost of producing advanced chips. U.S. companies struggled early on to support both design and fabrication, leading many to prioritize design. TSMC, by focusing exclusively on manufacturing, gained a major advantage and, as of 2025, produces about 90% of the world’s most advanced chips.

Originally known as the CHIPS for America Act, the legislation was first introduced in 2020 by Representatives Michael McCaul (R-Texas) and Doris Matsui (D-Calif.) and Senators John Cornyn (R-Texas) and Mark Warner (D-Va.). Despite support from both parties, the bill stalled in Congress. It lacked a funding package and also faced pandemic-related disruptions, political gridlock, and an approaching election cycle.

In 2022, Representative Tim Ryan (D-Ohio) introduced a revised and expanded version under the name CHIPS and Science Act. This iteration paired semiconductor manufacturing incentives with broader investments in science, research, and workforce development. The bill passed with bipartisan support and was signed into law by President Joe Biden on August 9, 2022.

The CHIPS and Science Act authorized nearly $280 billion in spending over 10 years, with funding divided between two broad priorities: revitalizing the domestic semiconductor industry and advancing U.S. science and technology leadership. About $52.7 billion was allocated specifically for the semiconductor sector, while more than $200 billion was authorized for research, education, and commercialization programs at multiple federal agencies.

To boost U.S. chip production and reduce reliance on foreign supply chains, the act dedicated $52.7 billion to the semiconductor industry, including:

Funding has been awarded to several major companies, both domestic and international, that are investing in U.S. facilities or forming partnerships with U.S.–based companies. Recipients include Intel, TSMC, Samsung, Micron Technology (MU), and Texas Instruments (TXN).

Beyond semiconductors, the CHIPS and Science Act directed more than $200 billion toward scientific research, STEM education, and the development of new technologies. The law funded long-term initiatives in basic research, workforce training, and efforts to bring emerging technologies to market.

Key agencies to receive funding included:

The act also authorized the creation of Regional Technology and Innovation Hubs, federally funded centers aimed at spurring high-tech economic growth in underrepresented or economically distressed regions across the U.S.

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An Intel plant in Chandler, Arizona, was among the many projects begun after the CHIPS and Science Act was passed.

Adam Schultz—Official White House Photo

Since the CHIPS and Science Act was enacted, more than 100 semiconductor projects have been announced in 28 states, with companies expected to spend an estimated $500 billion to build fabrication plants, expand production facilities, open research centers, and train new workers.

The surge in spending marks a shift toward rebuilding domestic chipmaking capacity after decades of offshoring. If the plans hold, the United States could account for nearly 30% of global production of leading-edge semiconductors by 2032.

Several major projects illustrate the scale and ambition of this transformation:

Analysts estimate that the CHIPS and Science Act could lead to the creation of more than 122,000 jobs in manufacturing and construction, along with 68,000 positions in semiconductor facilities. In total, it could support over 320,000 additional jobs throughout the U.S. economy, if planned projects proceed as expected.

Although the law authorized more than $200 billion for research and education, actual appropriations have often fallen short—especially for the National Science Foundation—limiting its potential impact on U.S. scientific progress.

Funding for semiconductor projects has also rolled out slowly, delaying construction and weakening the act’s ability to respond quickly to competition from major producers in East Asia, including China, Taiwan, and South Korea.

Further, critics have raised concerns about how companies are using subsidies, arguing that the money could indirectly benefit foreign-owned companies or be used for executive enrichment, such as through stock buybacks.

Transparency and accountability, too, have drawn scrutiny, particularly when it comes to CHIPS Act agreements that govern health, safety, labor, and the environment. Some lawmakers and advocacy groups have called for companies to be required to honor these commitments and publicly report their progress.

As new semiconductor plants begin operations, the industry faces a separate but pressing challenge: a shortage of skilled workers. Nearly 115,000 additional workers will be needed by 2030, according to the Semiconductor Industry Association. Based on the current rate of degree completion for technical roles, as many as 80% of those jobs could go unfilled. To close the labor gap, the industry is working with universities, community colleges, technical schools, and apprenticeship programs.

In March 2025, in his joint address to Congress, President Donald Trump criticized the CHIPS and Science Act as wasteful spending and urged lawmakers to “get rid of it,” favoring tariffs over subsidies.

Although the act remains intact due to strong bipartisan support, the Trump administration has paused some grants, attempted to renegotiate existing awards, and signaled a shift away from expanding federal subsidies, introducing uncertainty about the program’s long-term future.